India’s crypto ban could be fake news

The crypto community was sent into a
spin this past week as the news broke that a bill had been proposed
in India
banning all cryptocurrencies including Bitcoin, with users
potentially facing a 10-year jail sentence if found to be partaking
in the industry.

The “Banning of Cryptocurrency and
Regulation of Official Draft 2019”, proposed the imprisonment of
those who “mine, generate, hold, sell, transfer, dispose, issue or
deal in cryptocurrencies”. It also put forward the idea of India
developing its own cryptocurrency.

The bill made various crypto
commentators and leading figures to criticize the Indian government
and the country’s economic affairs secretary Subhash Chandra Garg
who has led the drafting.

John MacAfee led
the charge in denouncing the proposed bill saying “the war has
begun” and called on Anonymous and others to stand up against the
Indian government. Binance’s CEO,
Changpeng Zhao, said the bill would be a “push” for privacy coins
like Monero in the nation.

However, it appears that many have
jumped the gun, and an Indian crypto ban is not anywhere in the
government’s agenda.

The
Reserve Bank of India denies involvement

Firstly, the Reserve Bank of India
(RBI), the country’s central bank, has denied any involvement in
the bill and has not been consulted about it. Not only that, but, it
has also not received any written communication that a government
department is contemplating such a move.

This seems interesting since the
Reserve Bank wields considerable power. According to local news
reports,
a government official said: “a decision on the launch of Digital
Rupee would be taken after consulting the Reserve Bank of India
(RBI).” So it would be absurd to think that a ban on
cryptocurrencies would be undertaken without the approval of the
Reserve Bank or at the very least a consultation. The proposed Indian
cryptocurrency was also played down by the Reserve Bank earlier this
year, showing further the disjointedness of this bill.

The Reserve Bank has been cautious
towards cryptocurrencies and looked to enforce strict regulations.
But, interestingly, it has never outwardly denounced them. In January
of this year, the Financial Stability Board (FSB), which has 20
countries in its group, including India, said that cryptocurrencies
are not a threat. This advice must hold weight for the Reserve Bank
as it quoted them in a report it released at the time.

” The FSB has undertaken a review of
the financial stability risks posed by the rapid growth of
crypto-assets. Its initial assessment is that crypto-assets do not
pose risks to global financial stability currently.”

It
is just a proposed bill, nothing concrete

Fortunately, the bill is merely a
proposal, and if it were to come about, it would have to pass through
the two legislative houses of the Parliament of India, the Lok Sabha
and the Rajya Sabha. With the huge monetary power of the crypto
sphere, it is not hard to see various lobbyists and campaigners
swaying the votes of politicians in the nation.

As many will know, the legislative
process is a long, tedious, and it could take months or years to pass
and be put into law. That is a lot of time in the crypto space and
circumstances could certainly change in the future.

The bill, if passed, will also face the
Indian Supreme court. The Indian
banking ban on cryptocurrency-focused firms is set to be heard
on July 23rd of this year, and this result could have serious
implications for the outcome of this proposed bill.

Although it does appear rather bleak
for the crypto community in India, there are no reasons to be too
alarmed at the prospect of this bill. There are still many hurdles
that need to be crossed, and a lot of time will pass before anything
concrete is decided. Just look at China and its numerous reported
banning of Bitcoin, this saga will no doubt continue for a long time.
Let’s keep fingers crossed that the bill remains to be a proposal.